The price of Brent, which fell to nearly $92 a barrel on Tuesday, came close to $97 a barrel on Friday. The U.S. DOE report showed a 7.1 million-barrel decline in commercial and a 3.4 million-barrel decline in strategic crude inventories, or 1.2%, for a total of 10.5 million barrels. 

The main factor was the increase in oil exports to a new record of 5.0 million barrels per day (mb/d). U.S. net oil imports fell to an all-time low of 1.1 mb/d as a result. U.S. oil production estimates also fell by 0.1 mbps to 12.1 mbps. However, fluctuations in export and import flows from week to week are temporary factors that cannot support the price of oil for long.

Oil and gas quotes – what’s happening in the market?

Demand for petroleum products in the U.S. is a much more important driver. U.S. gasoline shipments rose 2.5% over the previous week and 0.2% year-to-date to 9.35 mbps, also 3.1% above the four-week average. As a result, gasoline inventories fell by 4.6 million barrels, or 2.1%. Gasoline supplies provide an indication of the dynamics of demand. They have declined year-over-year for nine consecutive weeks, with a 13% drop twice in July. Therefore, even a slight increase in apparent demand is perceived by the market with optimism.

Oil prices strengthened as gas prices rose rapidly to new records: the monthly TTF contract closed Friday at about $2,600 per thousand cubic meters, adding 19% over the week.

In terms of energy units, gas is now more than four times more expensive than oil in Europe. This is why everywhere possible, gas is being replaced by oil products – particularly in the energy and petrochemical industries. The total volume of substitution is not great, but it is enough for gas prices to start “pulling up” oil prices.

This dependence will continue to affect the oil market in the coming weeks. That is why, he said, “we are not expecting a sharp drop in oil prices while gas in Europe is trading above $2,000 per thousand cubic meters. Analysts forecast that Brent will stay above $95 per barrel in the new week.

At the same time, the alarming dynamics of diseases and quarantines in China limit the potential for oil growth. The new outbreak in Hainan province is likely to be localized, but the experience of the last months suggests a high probability of new outbreaks. Therefore, the forecast is a $95-100 range for Brent over the coming week.

Earlier we reported that a fall in Brazil’s harvest will trigger a rise in black coffee prices.